NetSuite Wants a Piece of Large SAP Customers' Business

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On-demand ERP vendor NetSuite is targeting large SAP users with a new offering that links its OneWorld application to SAP systems.

SuiteCloud Connect for SAP allows SAP users to take information like general ledger data or orders from NetSuite and roll it up to the main corporate SAP system. It is a software and services package that employs integration methodologies and code developed over time by NetSuite's professional services team, said David Downing, chief marketing officer.

NetSuite is not under the illusion that large enterprises will rip out their SAP systems and replace them with NetSuite, Downing said. Instead, it hopes companies will take a close look at using NetSuite when adding a new division or remote office, versus expanding their SAP implementation.

AMR Research analyst Bruce Richardson called the announcement "a very clever move" that "should generate attention from C-level executives looking to drive down IT costs as the economy slips and slides," in a research note. "The challenge will be turning interest into invoices without incurring drain-the-bank sales costs," he added.

SAP could have positioned its own on-demand ERP software, Business ByDesign, in the same manner, but has not, Richardson said. "Instead, Business ByDesign was aimed at first-time customers looking for a new software-as-a-service offering."

Meanwhile, NetSuite's gambit could benefit further from the fact that SAP has reined in the roll-out of Business ByDesign while it works to ensure the software can turn enough of a profit.

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